The term ‘redundancy’ is in practice used loosely. For tax purposes, it is necessary to be clear whether the reason for an employee leaving his employment can genuinely be classed as redundancy. In reality, it may be that the employee has left for some other reason – typically, because he has been dismissed (with or without the notice period to which he is entitled) for incompetence, dishonesty, etc. or because he has retired or has resigned.

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